The
Tennessee legislature is considering many interesting pieces of legislation in
the 2013 legislative session.One bill
that is of great interest to Tennessee attorneys as well as anyone handling Tennessee
personal injury claims is SB 1184/HB 0978.The bill is aptly named the “Phantom Damages
Elimination Act”.This bill would
effectively abolish the collateral source rule in Tennessee.

The
collateral source rule prevents a defendant from introducing evidence that the
injured plaintiff received payments from any other source to try to reduce or mitigate
the damages sustained by the plaintiff.The Tennessee Court of Appeals in Fye v. Kennedy,
991 S.W. 2d 754, 763 (Tenn. Ct. App. 1998) stated that:

An
injured party's right to recover his or her “reasonable and necessary expenses”
must be viewed in connection with the collateralsourcerule:

Normally,
of course, in an action for damages in tort, the fact that the plaintiff has
received payments from a collateralsource, other than the
defendant, is not admissible in evidence and does not reduce or mitigate the
defendant's liability.

Proposed
SB 1184/HB 0978
would effectively eliminate the collateral source rule in Tennessee. In fact, the language in the bill would only
allow a plaintiff in a personal injury or wrongful death case to recover economic
damages for medical and other costs of medical care for:

(1) The amount actually paid by or on behalf of the claimant;

(2) Any amount necessary to cover
unpaid medical expenses;

(3) Any amount necessary to satisfy
future medical charges.

Remember,
in Tennessee Health Care Liability actions (Medical Malpractice cases), the
collateral source rule was eliminated by statute with T.C.A.
§ 29-26-119
a long time ago. As a
result, there is a precedent for this kind of action.

SECTION
1. Tennessee Code Annotated, Title 29, Chapter 39, Part 1, is amended by adding
a new section as follows:

29-39-105.

(a) In
any civil action for personal injury or wrongful death to recover economic damages
in which liability is admitted or established, the economic damages that may be
recovered by a claimant for medical and other costs of health care shall only
include:

(1)
Any amount paid by or on behalf of the claimant;

(2)
Any amount necessary to satisfy unpaid charges for medical and other costs of
health care that have been incurred but not yet satisfied by or on behalf of
the claimant; and

(b)
This section shall not be construed to increase the amount of or type of damages
recoverable under state law.

(c)
This section shall not be construed to alter subrogation rights under state law.

(d)
This section is in addition to, and does not otherwise affect, any other limitation
on damages under state law.

This bill was debated and discussed multiple
times in the 2013 Tennessee legislative session.However ultimately, the Senate Judiciary
Committee decided to establish a study
committee to further discuss and study the impact of this bill over the summer
and fall of 2013.The bill will be
brought back in 2014 pursuant to the request of Senator Jim Tracy, who
sponsored the bill in the Senate, with the approval of the Judiciary Committee.It will be interesting to see what the study
committee recommends for this bill.I
expect this to be a hotly debated and contested bill in the 2014 legislative
session.

Follow me on Twitter at @jasonalee for updates from the Tennessee Defense Litigation site.